Are you sure you need extra space?

November 16, 2020by Elena Stefan
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Are you sure you need extra space?

Ok, you have implemented a WMS- warehouse management system, all the processes have been configured according to your business layout, but what happens when you are running out of space, due to the high quantity of inventory that you are holding?

In case you need a WMS solution, Manhattan Associates can provide you the latest innovative version of a warehouse management system:
https://interactive.manh.com/products/warehouse-management

But in order to be able to use WMS properly it is mandatory to keep storage utilization under 85%.
So, before thinking of expanding the facility or renting additional space for storage you should take some time and analyze how can you utilize at maximum the currently warehouse like:

  • Using the space effectively
    The Pareto principle can be applied also in warehouse storage. Usually 80% of the activity in the warehouse comes from 20% of the items, these are having fast moving within the warehouse. So, considering this principle, a product analysis should be done in order to determine the optimum location for your SKU’s.
  • Maximizing your space by storing items according to size
    You can optimize available space by separating products by size and storing them with like-sized items. Place those smaller or larger items in separate areas of racking, it doesn’t necessarily need to be a completely different row, just separated from the other items.
  • Sort your Sku’s into Different Product categories
    Look at your inventory levels and the growth projections by SKU, considering the unit of measures and other variables if is the case (like special handling equipment, special condition for storage such refrigerator for example).
  • Eliminate obsolete inventory to increase storage place
    Your storage place is valuable and obsolete inventory shouldn’t be taken from it, therefore get rid of the items that haven’t been picked for a long time. You can sell them for a big discount or donate them to charity or return them to the vendor.
  • SKU’s rationalization
    Apart from paring down the inventory, cutting the inventory cost and eliminating spending to produce, store or keep something that is not generating income, Sku’s rationalization can improve your forecasts, since you are holding less items and by default will be simplified and streamlined the number of workers, suppliers and equipment. Implicit you will benefit from the extra storage space.
  • Implement Cross docking process
    In cross docking facilities, the cost related to storing inventory is significantly reduced because of little to no storage at all. Among the benefits, just to mention a few more: reduction of material handling, labor cost saving, reduction of delivery time and so on…

You can see a case study for Cross-docking here:
https://www.manh.com/resources/case-study/alspec-selects-manhattan-scaletm-optimize-warehouse-management-operations

It’s worth mentioning another helpful process for overcoming some of the over storage challenges, the Slotting optimization system. Slotting is the tool by which you can determine what product should be placed in what picking location or placed near shipping doors, for example, if it is a fast-moving product, in order to reduce travel distance. Also, with slotting you can optimize product placement for new or seasonal products.

You can find more about Slotting by accessing the link below:
https://www.manh.com/en-au/products/slotting-optimisation

Good luck in choosing the best solution for your business, we are here to help you!


Elena Stefan

Elena Stefan

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